business

It looks like Iron Man was a success at the box office, making a better-than-expected $100.7 million in its opening weekend, according to The Associated Press. This kind of puts the video-game-biting-into-movie-sales fear to rest. In fact, it debunks that logic in a match-up between more comparable properties.

Going into this weekend, I thought the big competition wouldn’t be Iron Man vs. Made of Honor, it would be Iron Man vs. Grand Theft Auto IV. Both properties focus on the same demographic — comic book fans, nerds, etc. — and it’d be interesting if folks would spend more time in Liberty City than in the movie theaters.

What constitutes a blockbuster in the film world? A huge, anticipated movie, expensive to produce but also generating borderline obscene box office figures. Well, recent reports say both are true of GTA as well.

GTA IV is the most expensive game of all time, with development costing in the neighborhood of $100,000,000. By comparison Iron Man, the big-budget movie coming out this Thursday, had a budget of an estimated $186,000,000 according to IMDb.

Why would anyone spend that much to produce a game? Because the rewards are worth the financial risk. Bloomberg estimates the first-week sales of GTA IV to be $360,000,000. For the first week. By comparison the highest-grossing movie in American history, Titanic, made $600,779,824 in its entire run.

And people still talk about the gaming industry like it’s a semi-serious diversion for kids and social outcasts…

Blockbuster, the video rental store, announced that it has started selling games and consoles at all of its U.S. stores, according to the Industry Standard.

The funny thing is that I thought all Blockbusters did that. I remember buying Super Metroid at my local Blockbuster when it was sold out everywhere else, but I guess, the company is putting more emphasis on that side of the business.

Should the might Gamestop be concerned? Well, not right now, I don’t exactly equate Blockbuster with video games. On my list of stores, they’re way down with the likes of the Ashby Station swap meet and those funky mom-and-pop stores you see in San Francisco.

We’ve all heard reports of the Wii selling like gangbusters. It’s usually the top selling console for month X. But that leaves the New York Times wondering how many games is the system selling?

The big answer is not many.

According to the article, the console is selling, but the folks who are buying are content with Wii Sports and the two or three titles they already have. It later goes on to examine the reasons for this. One answer finds that casual games don’t need that new stimulation. Another expert says that games for the casual console aren’t marketed right.

The most telling quote of the article:

â€œAdvertising on GameInformer and 1up.com just isnâ€™t reaching this audience. When you make a game like Zack & Wiki or Boogie, which turns the hard core off and doesnâ€™t reach the masses, then youâ€™re in trouble.â€
– Wedbush Morgan analyst, Michael Pachter said.

Does this mean, casual games should be advertised on Oprah or in Newsweek?

Sometimes I wonder why all these great game journalists leave a fun gig to work for the industry.

Greg Kasavin was once the executive editor of Gamespot, but he made the jump to work as an associate producer for EA Los Angeles. Popular 1up writer Luke Smith went to work for Bungie and things on the 1up Yours podcast haven’t been the same.

And then I hear the salary for someone working in the industry. According to a survey by Game Developers magazine, the average salary is $73,600. Yep, that isn’t bad considering the fact that excluded some outliers like folks who make more than $202,000 and those who barely get by at $10,000.

I’ve been thinking about this question for a while now. I always wondered why an inordinate amount of great games come from Canada. What makes the folks up north so special that Electronic Arts and Ubisoft have studios that make AAA titles out there.

The Brits have had enough of it and now they’re doing an investigation through the European Union into big bad Canada’s use of tax credits to lure studios and talent from Europe.

Frankly, I don’t get what the attraction is. It’s Canada. You can be living in Europe. It’s cold in Canada. Some parts of Europe are downright nice. Then there’s the food. Europe is the heart of Italian, French and Spanish cuisine. Canada has poutine. Nuff said.

There have been a ton of articles calling video games recession proof, but there’s one area that may be vulnerable and that’s in-game advertising, according to the The Street.com.

The article goes into how companies don’t spend as much money in a gloomy economy and that may effect things like that Burger King billboard in Burnout Paradise. (Oh so, tasty.) Agencies may have a little more trouble filling those ad slots … or maybe not.

For all the worry that the story projects, the sources in the article don’t seem super concerned. Massive, a company that helps put up in-game ads, says they’re basically immune to all this. So don’t worry, Battlefield Heroes fans.

Overall, it’s pretty interesting read into how in-game ads are actually produced. You get to see a couple of players and check out the things that advertisers are looking for in video games. (It’s subtle.)

In the article, she compares the industry to movies, which do pretty well during a recession. Apparently, folks still want to be entertained while the economy falls apart around them.

There doesn’t seem to be a lot of gloom and doom on the analyst side either. Kalning talks to one of financial experts and he says the industry has a pretty strong chance of coming out of this fairly well.

But Nariman Behravesh, chief economist at Global Insightdoes warn, â€œIâ€™d say thereâ€™s a one in four chance that we go through a major recession and the video game industry gets hit.â€

Maybe Danny, who has an economics degree, can shed a little more light on this.

Edit from Danny: I can and will. I always love a chance to actually use my degree. But I put it in the comments since it’s pretty boring for people who don’t care about econ.

Let the drama unfold. The report says that the publisher of Grand Theft Auto IV rejected the deal. And in response, EA went public with the proposal, hoping to (ahem) inform investors.

What comes next can dramatically reshape the landscape of games, particularly sports titles. Take-Two is a conglomerate that owns the 2K Sports brand in addition to the Bioshock franchise and of course Rock Star.

So if EA buys out Take-Two, what does that mean for 2K Sports’ NBA, NHL and MLB titles? Could this deal effectively end the rivalry between EA Sports and 2K Sports?